Building a GF would be a much better idea I think. Besides increasing the value of your property, you can also rent it out once it’s done. If that idea doesn’t appeal to you, you can also transform the GF into a home office, workshop or even a storage space. It costs cheaper to build too.

A granny flat is a better and more profitable idea. However you need to check for council approval. If you’ve been given the okay signal then consider the location of the granny flat. You need to get a separate entrance and exit for it. You obviously would want it separate from your main house right.

First check for council approval and second, you might want to reconsider the size of the GF you’re building. You do know you can build it up to 60 square meters though?

You could probably charge more if you have the flat furnished but then again, that would depend on where you are located. If you’re connecting internet to the flat, you could impose additional charges for it too.

As to issues regarding tax, you’ll need to consult with an accountant on that.